A prenuptial agreement is not a bewildering term that you should be fearful of. Some couples often jump out of their seats at the very idea of it. Probably because it sounds more like a formalized deal than a loving exchange. The term just has a threatening aura around it.
Prenuptial agreements are far from that though. Even though they seem to steal the inherent emotionality there is to marriage, they are more of a safety net. While marriage is a beautiful and delightful experience, it is a legally binding contract in itself. Simply because it roots itself in love and affection does not mean that those things are enough to keep it up and running.
A prenuptial agreement is not going to de-romanticise your marriage, rest assured. It might incite some disagreements and invite some revelations. The process might also be a little tedious. However, it is worth the safety net it will provide in the long run.
Prenuptial Agreements Definition
A prenuptial agreement, more commonly referred to as a ‘prenup’ is essentially a legalized agreement signed by two people before they get married. It is sometimes also called an Antenuptial agreement. This document, however, does not define chores, responsibilities or answers difficult questions like ‘Whose parents house are we going to for thanksgiving!?’
Instead, this document covers base on some much bigger things.
Possessions such as properties, assets and even children’s rights undergo a lot of difficult tussle after a divorce, separation or untimely demise. Signing a prenup beforehand can make these stressful situations somewhat easier to handle.
This formal contract mentions the transfer of ownership, transfer of money, division of property between a couple in the event of a divorce or death. This outline is meant to help things become fairer and less complicated. Your financial roles are agreed upon and specified in this document.
During a divorce, our emotions, anxieties and grievances can get the better of our sensibilities. In order to keep the process fair, couples choose to sign these agreements and decide earlier on what happens to their things before they part their ways. Seems like a logical thing to do, doesn’t it?
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Is Getting A Prenup A Good Idea?
Prenuptial agreements are a very practical thing to invest your time and energies in. No matter how scary they may sound or seem, they really are not a death sentence. On the contrary, they can be liberating. Marriage is not only a union of two lovers but is also a union of their material baggage.
This material baggage could definitely use some organizing before you dive straight into long term commitment with another person. So let us look into the question, what does a prenuptial agreement protect? Easy answer, it essentially protects you.
Whether it is your capital assets, acquired wealth or even your own home, a prenup will protect you from any legal and lethal war games. Prenups have always been a valid choice for people in the United States. It was even uniformly recognized in the 1983 Uniform Premarital Agreement Act.
Today, people are gradually delaying their marriages to later stages in their lives. Careers are taking a lot more precedence. When careers take the steering wheel, financial stability, independence and acquisition take the shotgun seat.
Now that people are more aware of handling their finances, it is better for them to know how to secure and adjust the same. Prenuptial agreements are a milestone considering the changing times. For example, let’s say you have inherited a family home in the Hamptons. The house has been in your family for generations.
While you do not visit the house much, it is an old house, sentimentally close to you, and rapidly appreciating in monetary value.
For the sake of the argument, let’s say you and your spouse get a divorce and they stake a claim at the house. Or when you die, the house is at the disposal of your spouse. They may remarry and not see the emotional value in the home anymore. Instead of close kin, your family home will be under the control of a past spouse.
They might sell it or worse, open an ice-cream shop in its place. Now, you would not be happy about either of those scenarios. Nor would your family. Save the trauma, sign a prenup and seal the future of the home.
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What Are The Requirements For A Valid Prenuptial Agreement?
No matter how insulating they are in nature, prenups are not a one-sided assertion of your rights and wishes. It is still a compromise arising from extensive discussion, understanding and consent.
You cannot simply waltz into a room with a paper heavily inked with your demands and expect your partner to obey. Here are some strategic ways to prepare for a valid prenuptial agreement:
1. Get your own attorney to negotiate your prenuptial agreement
No, we are not preparing you for war. Prenups are hardly as taxing as divorces, but they can be a lengthy and consultative affair too. It is best when each party has their own attorney working alongside them.
Yes, this seems like a divisive action that mellows down the pre-wedding excitement. However, excitement can make some way for practicality.
2. Lay all your cards on the table
To avoid complete vulnerability in the future, you have to sit down and be vulnerable today. Both parties must be completely honest during this process and openly express their net worth and reveal ownership of everything. Even inheritance that could possibly make way to you in the future should be revealed.
3. Form a checklist of all that you would like to address in your prenup
Your prenups are your own decisions. They can be as generous as you like but preferably not too coarse. Setting up alimony, access to funds, transfer of ownership – these concerns are at your sole discretion. However, these concerns must be addressed systematically.
If one has children from previous marriages, monetary allocation regarding their future should also be addressed by the prenup. If you are planning to have children in the future, their inheritance can also be determined by a well thought out prenup.
However, custodial decisions regarding children have no room here. Talk money, and not who gets the children on the weekends.
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4. Think about your future too
What should you ask for in a prenup is also an important concern that you must not forget to evaluate. Prenups are built on fairness and you might be on the receiving end once in a while.
Avoid getting too greedy but also do not let love smother your decision-making.
5. Maintain dignity and respect during deliberations
Consent in prenups is as important as consent anywhere else. Think about why you need a prenup. It is not merely a contract to defensively and aggressively protect your life’s work. It is the accommodation of a new individual in your world and an establishment of how much you would want to share.
Sharing is caring but sharing is not snatching or averting. Keep the pressure low during these deliberations and take a considerate view of your partner’s happiness as well.
Dr Dre, the famous rapper, is recently undergoing a scandal because his wife is calling him out for coercing her into a prenup. While we cannot comment on the truth in that information, it is a terribly sad thing to do that could affect your future prospects in wedlock and in business.
How Much Can A Prenup Protect You?
It’s a misnomer that prenups are only helpful to those who are wealthy or soaring financially. It is surmised that itty bitty businesses or middle-class households do not necessarily require the same organization of money. However, that is a blaring falsity.
Why you need a prenup is not a question that is answered by the enormity of your bank account. It is actually determined by how much you are willing to risk emotionally and financially. Marriage, just like everything else in life, is not set in stone. 40-50% marriages in the US, end in divorce.
Life can change sooner than we think. It is when we least expect something monumental to happen, it slips right under us and we fall prey to a range of confusions.
Marriages can be like that too. Nobody goes into a marriage expecting it to end, but the reality is, that it always can. While a prenup cannot salvage the heartbreak, it sure can protect you from the risk of grave financial instability.
1. Protecting your personal wealth with a prenuptial agreement
To ensure easy distribution of wealth and property between one’s spouse and kids, prenups have a heavy hand. It’s like an insurance policy but without the hassles of an insurance company.
With a prenup, you can decide prematurely, how much wealth you lay aside and divide between your spouse and kids.
2. To keep you debt-free
If your partner has individually acquired debt that you may or may not know about, that debt may creep up on you during a divorce or after their death. A prenup is a magic paper that can make such debts go away. By specifying your lack of responsibility toward it, you will never have to assume it. Truly dodged a bullet there.
3. In case you do not like your state laws
When you do not have a prenuptial agreement, after a divorce, your state laws intervene and determine how your capital is distributed. While these do provide certain protections, you might not love everything about them. Our advice is you look into them extensively or sign a prenup and make your own rules instead.
4. Save your investments and business plans
Marriages can be as uncertain as our future ventures. It may not seem necessary at the time but you might want to invest somewhere greatly or change the operations of a current business.
In order to do that with ease and not give up half your earnings to your ex-spouse, a prenup can be very helpful. A prenup will protect your future assets. Divorces are messy and you do not want someone you wouldn’t get into bed with literally, to acquire your business.
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5. Alimony and Child Support confusion
We all opine differently on how we would want to spend our money after a divorce. A divorce itself without the guidelines of a prenuptial agreement can be a lengthy and extensive affair.
You can avoid spending thousands of dollars on divorce proceedings to discuss more money-losing scenarios like alimony by navigating these eventualities through a prenup. A healthy discussion pre-marriage about the possible consequences of a divorce and investments in child support should be cleared earlier on with a prenup.
It can be assumed that a prenup is not the consequence of a lack of love. Your marriage will continue to be happy, fulfilling and trusting. Prenuptial agreements are simply the prevalence of some wisdom and future concerns.
Therefore, while your marriage will consist of some pre-wedding jitters, you must also proceed with caution. Love is a beautiful thing and marriage only makes it better. However, make sure that love doesn’t blind your decision-making skills. Don’t compromise on the affection, but also do not compromise on yourself.